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Current Affairs

Taiwan purchases Lithuanian rum

Date: 10 January 2022 Tags: Miscellaneous

Issue

A Taiwanese liquor company has purchased 20,400 bottles of Lithuanian rum that were blocked from entering China.

 

Background

This is one of the latest diplomatic solidarity shown by Taiwan to Lithuania amidst the trade war with China.

 

Details

  • The purchasing was done by Taiwan Tobacco and Liquor Corp. after it was found out that a consignment of rum from Lithuania’s MV Group Production would be blocked by China.

  • China has blocked trade with Lithuania after it strengthened its ties with Taiwan. Demand for many Lithuanian products has skyrocketed in Taiwan, including Chocolate.

  • Taiwan has also announced that it will be setting up a $200 million fund for investing in Lithuania.

 

Reasons for blocking in China

  • Lithuania had recently allowed Taiwan to set up a de-facto embassy in the country, which irked China. This resulted in blocking of all imports from the Baltic nation.

  • In addition to new office, the name has been mentioned as ‘Taiwan’ instead of ‘Chinese Taipei’ as is the common norm.

  • China has downgraded trade status of Lithuania for fueling Taiwan separatism. It has accused it of threatening territorial integrity.

 

The developments

  • China removed Lithuania from country of origin tag, making products from the country to fail customs clearance.

  • Lithuanian diplomats are leaving Beijing citing security concerns. However, Lithuania clarified that it still follows ‘One China Policy’.

  • This not the first time China is using trade as a weapon. It had previously blocked import of coal, wine and lobsters from Australia, as well as pineapples from Taiwan.

 

One China Policy

  • Under this policy, major governments of the world recognise only one Chinese government, which is the People’s Republic of China (PRC).

  • China refuses to recognise Taiwan as a sovereign nation and any country having diplomatic ties with PRC must de-recognise Taiwan (ROC).

 

World reaction

  • European Commission has criticized the trade sanctions on Lithuania and has taken up the issue with the World Trade Organisation.

  • The US has also condemned Beijing’s actions. France and Germany have been pushing for stronger EU action against Beijing.